Michigan Legislature Approves Minimum Wage Increase & Paid Sick Leave

Lawmakers in the Michigan Senate and House of Representatives passed two initiatives in September 2018 that appear to benefit Michigan workers. These adopted proposals provide for a gradual increase in the state minimum wage and mandate that most employers provide their workers with paid sick leave. However, both of these citizen-sponsored proposals will likely undergo significant changes in the fall sessions of the legislature before they take effect in 2019.

Wages to Increase, Paid Sick Time to Be Mandatory

The wage increase proposal, as drafted by a ballot committee called Michigan One Fair Wage, provides for a gradual increase in the state minimum wage from its current rate of $9.25 per hour to $10 an hour in 2019, $10.65 in 2020, $11.35 in 2021, and $12 in 2022, with annual adjustments for inflation beginning in 2023. The minimum wage for tipped employees would increase from $4.80 in 2019 to $6.39 in 2020, $7.94 in 2021, and $9.60 in 2022, to equal the non-tipped minimum wage by 2024. (Under current law, all tipped employees are required to make at least the minimum wage including tips; if their tips do not make up the difference between the tipped employee minimum wage of $3.52/hour and the regular minimum wage, their employer is required to make up the difference.)

The last raise in Michigan’s minimum wage was pursuant to Senate Bill 934 of 2014, signed into law in May of 2014, which increased the minimum wage from $7.40/hour to its present level gradually over the course of four years. Future increases are tied to the Midwest Region’s CPI (based on the most recent five-year period for which data is available beginning April 2019); annual increases for CPI cannot exceed 3.5 percent and are subject to certain restrictions, including the Michigan unemployment rate.

The other proposal, drafted by a ballot committee called MI Time to Care, would mandate that employers let workers earn one hour of paid sick time for every 30 hours worked. Workers could earn up to nine days of paid sick time annually, depending on the size of their employer.

A Shaky Victory for Workers

Both proposals were scheduled for the ballot in November before they were passed by the legislature. Supporters of the minimum wage proposal needed 252,523 petition signatures to get the initiative on the November 2018 ballot; they obtained 372,105 signatures. The sick time initiative was similarly well-supported, gathering over 380,000 signatures to put it on the November ballot. By passing them into law, the legislature removed them from the public vote and made them easier to amend before they take effect in March 2019.

The Republican-controlled state legislature has announced its intention to amend the measures in its fall session, which it can do with a simple majority vote rather than the three-fourths vote it would have needed to amend a ballot proposal approved by voters. The actual impact on Michigan’s minimum wage and the fate of any proposed mandatory sick leave legislation will remain unanswered questions until the end of the December legislative session.

About Jesse Young

Shareholder Jesse Young is an employment litigation attorney. As a member of Kreis Enderle’s Business and Employment Group, he represents individuals and businesses involved in serious employment disputes including but not limited to issues of severance negotiations, discrimination, retaliation, whistleblowing activity, employment contracts, terminations, and compliance. Jesse also has extensive experience handling wage and hour disputes arising under the Fair Labor Standards Act (FLSA) and similar state laws.